Assignment Problem: The statement of profit or loss for Kasinski Manufacturing Ltd contains the following condensed information,
KOSINSKI MANUFACTURING LTD
Statement of profit or loss
for the year ended 31 December 2016
|
Revenues
|
|
$ 6 583 000
|
|
Cost of Sales
|
$ 4 000 000
|
|
|
Operating expenses, excluding depreciation
|
893 000
|
|
|
Depreciation expense
|
880 000
|
|
|
Loss on sales of machinery
|
27 000
|
5 800 000
|
|
Profit before income tax
|
|
783 000
|
|
Income tax expense
|
|
353 000
|
|
Profit
|
|
$ 430 000
|
Machinery was purchased at a COSI of S750 000. The following balances are reported on Kosinski's 2016 statement of financial position at it December:
| |
2016
|
2015
|
|
Cash
|
5 672 000
|
5 130 000
|
|
Account receivable
|
775 000
|
610 000
|
|
Inventories
|
834 000
|
867 000
|
|
Account payable
|
521 000
|
501 000
|
|
Provision for warranty
|
103 000
|
106 000
|
|
Machinery
|
3 020 000
|
2 400 000
|
|
Accumulated depreciation
|
1 647 000
|
800 000
|
|
Loan payable
|
1 200 000
|
1 000 000
|
|
Share capital
|
1 500 000
|
1 500 000
|
|
Retained Earnings
|
330 000
|
100 000
|
REQUIRED:
a. Prepare the statement of cash flows using the direct method.
b. Prepare the reconciliation of profit and cash provided by operating activities.
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